HYBE, the company behind K-pop groups BTS and TOMORROW X TOGETHER, has acquired a major stake in rival K-pop company SM Entertainment, home to artists like NCT 127, Super M and Aespa. . HYBE acquired a stake in the company for his 422.8 billion won ($334.3 million), becoming the company’s largest shareholder, according to a regulatory filing released in Seoul on Friday (Feb. 10). rice field.
HYBE buys 3.5 million shares from SM Entertainment founder Lee Soo Man, the largest shareholder of SM Entertainment. The deal gives HYBE his 14.8% stake in the publicly traded music company, with a market capitalization of approximately $1.8 billion. HYBE’s market capitalization is worth approximately $6.5 billion.
Lee, who is currently embroiled in a power struggle with SM Entertainment’s management, owned about 18.5% of SM Entertainment’s outstanding shares, according to the company’s investor website. After the sale to HYBE, he holds about 869,000 shares and his 3.7% stake. According to the filing, Lee has a put option to sell the remaining stake one year from the date of his HYBE acquisition or business combination, whichever comes first.
South Korean technology company Kakao, owner of music-streaming service Melon, announced Tuesday that it will acquire a 9.05% stake in SM Entertainment, making it the company’s second-largest shareholder. However, Lee is against investing in cacao. According to reports, Lee intends to call SM Entertainment and Kakao’s plan “an illegal act against commercial laws and articles of incorporation” in which SM Entertainment issues new shares and convertible bonds.
The investment in SM Entertainment is HYBE’s second big deal in recent days. HYBE America announced Wednesday that it has acquired QC Media Holdings, the parent company of Atlanta-based hip-hop label Quality Control Music. The $300 million deal adds artists like Migos, Lil Baby, Lil Yachty and City Girls to his HYBE roster, with a quality control roster under his HYBE America CEO leadership scooter brown.